tv First Up With Angie Lau Bloomberg October 19, 2014 7:00pm-9:01pm EDT
a new president for india today. welcome to "first up." let's check in on markets this morning. to australia where australian equities are climbing one third 1%. the aussie dollar is trading at $.87. we are counting down to the open in japan and korea, as well. downikkei 225 last closed more than 1.4%. checking futures in chicago, it is pointing to a higher open. we are in correction territory. thats officially entered territory on friday, and the regional benchmark slumped for a sixth straight week. that is absolutely a concern for investors around the globe. we've got john dawson here with what we can expect monday. >> a pretty rough week last week. japan was down 11% since its high.
the msc x is down from its high. you can see those two charts. msci, asian stocks if you like. this is the big decliner. six consecutive weeks of declines, the worst stretch of year so five. that is the nikkei, a big drop. those are the facts. the question is, has the bottom been reached? clearly there has been a massive selloff. we will see how the morning unfolds. we have eurozone deflation issues. figures weren't so good last week. china, next year they could downgrade the growth target. fed, jamesthe bullard of st. louis, talking about it, should we be ending quantitative easing?
china, europe, and the u.s. are a concern. >> that helped boost markets last week, but it was one of the most volatile moves we've seen in equities since the financial crisis. >> let's go to the u.s. economy. last week, consumer sentiment rising, highest in seven years. u.s. factory production rebounding. jobless claims were down to a 40-year low. index, you can see -- 75% is this level -- it has fallen by 12%. that is a good sign. if this is dropping down a little bit, it is a good indication people are getting a little less nervous. on cpi fromres out the states. a very important figure, probably the most important figure of the week.
dpi is supposed to come in flat. a year on year 1.6%. the following price of crude could affect that. alibaba had a big ipo, the biggest. 2.5% afterthey rose a bad week before that. those are a few bright spots. that is one of the most important spots. you can't really assess if the bottom has been reached, but you can buy into the depths. my stock is example of that. i won't say what it is yet. >> i thought you were going to say too much. [laughter] john dawson, thank you. we hope you keep watching. some other stories we are following, china is preparing more help for the banks. the pboc is said to be planning a $32 billion injection for midsize banks.
month, the central bank pumped $82 billion into china's five biggest lenders. chinese censors have shut on a local website owned by the country's third richest man. a notice posted on a government news real says the website will be closed for seven days because of lack of control of content and spreading vicious and harmful information. the website provides local news to 15 million people in the northern province of china. narendra modi has taken his boldest economic reform, overhauling the country's fuel pricing system. it is part of his pledge to revive the economy and attract foreign investment. he has raised tariffs on natural gas. the move comes as his party polled strongly in state elections. hasn's first passenger jet
made its official debut four years late. the mitsubishi aircraft rolled the jets in front of 500 guests. will come aisle mrj in two different versions, developed at an estimated cost of $1.7 billion. expected to make its first test flight next summer. the hong kong chief executive see why long says the democracy campaign in the city is now out of control. his warning came after a weekend of rising tension with more scuffles between protesters and police in hong kong. ivan man is there and joins us live. what can you tell us of the mood there?
>> it is a relatively peaceful mood and mount this morning, but what a difference a weekend makes. we have seen a lot of developments over the weekend. on friday when we were here, there were 500 police officers out here on every corner of this intersection, pushing away protesters. they were close to opening nearly all of these roads, but as you can see, parts of this intersection are pretty much paralyzed again. this major operation on friday prompted more protesters to show up. you can see them coming up right now. some of them have just woken up, getting their breakfast. this goes on for blocks. it wasn't a violent night overall in the last couple of night. there were some clashes between police officers. batons were coming out when
protesters were blocking some of these barricades. this was a major concern for the chief executive. he did speak to the local media station last night where he did say that he doesn't see a close end in sight. it is going to be hard to shut down this movement. decisionfe or -- the by the national people's congress's final, despite nds to have it revoked. here is what he had to say over the weekend. >> there is obviously participation by people or organizations from outside hong kong and politics in hong kong. this is not the only time when they do it. >> there have been arrests. there have -- has been violence. what can we expect from the talks?
>> that is the big question, and you. says this movement has gone out of control in terms of the people who started it and scripted it. the students say they are a little bit pessimistic about what is to come, but they are hoping to have some dialogue with the university leaders in the mix. they are hoping for some practical solutions, some direction to offer from the government, but they did say these talks are going to influence the movement progresses. >> thanks. indonesia will have a new president later today after a moment of political history. a wave of election on optimism, but expectations are some daunting
challenges. haslinda amin is in jakarta. this will be a remarkable day for indonesia. >> remarkable, historic. this is the first time in indonesia's history that an elected leader is handing power to an elected successor. there is a sense of hope, excitement. he's not from the political elite. he is a former furniture seller, the former mayor of a small town. yet he is set to be the president, the seventh president of the largest country in all of southeast asia, a nation of 250 million, a nation spread across 17,000 islands. don't be misled. he faces daunting challenges, and economy that is growing at the slowest pace in five years. politically, he inherits a divided parliament, and socially, the wealth gap has
never been wider. one of the first things he will have to do once he gets inaugurated is to announce his parliament, his cabinet. the fact that we are speculating the makeup of his cabinet shows how difficult it has been for him to put his team in place. take a listen to how whether he thinks he can but a technocrat as promised in place. 55-60% of the cabinet are professionals. the other 40% are politicians. that is the reality of politics. there is no way all of us will be professionals. they are technic rats and politicians. >> do you think that could be a professional cabinet that could help you eradicate corruption? ministers long as the
in the strategic economic areas are professionals. for example, finance, agricultural, and energy ministers, and the minister for state owned enterprises, they have to be professional. >> have you had to barter for seats? because had to give in you won the majority in parliament? will that take away some of the power you would have as president? >> we are open to everybody who wants to work with us. in parliament, it all depends on the approach. there has to be a political approach. there has to be political communication. if we have that, there will be no problem. >> that's some incredible insight from jokowi.
what can we expect from the ceremony today? >> that is happening at 10:00 local time, 11:00 hong kong. expect a grand celebration. it is a one-hour ceremony. international leaders will be there. ministeralian prime will be there, along with u.s. secretary of state john kerry. five.leading a team of as far as we know, the lows -- the list has grown and grown. it shows how important indonesia has become to its neighbors and how key the neighboring thinkies are convinced -- developing a relationship with jokowi is. the top bands in indonesia will jokorforming in honor of
widodo. metal flat -- heavy metal fan. hard, but as we say at bloomberg, work harder. that is the case for jokowi. is going to present a new show later on today. come, a nervous selloff followed by a rally, but are the uneasy? wearel going to take a look at the markets with a hedge fund manager coming up next. you are watching "first up." ♪
they are expected to show the economy expanded at the slowest pace in five years. a bloomberg survey expected the government may cut next year's growth target to as low as 7%. third-quarter net income is expected to drop 7% for hyundai. this comes after the automaker reached an agreement with autoworkers in south korea. the stoppages may have cost hyundai over $847 million. on friday, we get china's september property prices. values the -- continued to fall -- new home values continued to fall in august. my next guest started a hedge fund to invest in liquid securities, encoding stocks, bonds, and riveters. he is the founder and fund manager of luminance global fund. the volatility of last week has
certainly added a lot of interest in this arena. where do you think it goes from here? have markets calm down a little bit, or can we expect more volatility to come? >> good morning. we are expecting a lot more volatility going forward. we are prepared for more going forward. we see asia having a lot of earnings coming up. the unrest in hong kong is adding to the situation. it is a long-term impact. it is not just a one-week thing. it is something that will have impacts of her three weeks, three months and so on. can you tell us why you are looking at it that way in terms of occupy hong kong? the sentiment has been, broadly
speaking, that this might be a short-term hit, oh do you not think so? >> if she just showed that one country, two systems is not really a done deal. investors from abroad, from the u.s., they will reassess how to assess hong kong. it is not just like china but not china. it will be treated differently. you can expect a impact on fashion impact on macau gaming. it will all be negative. we will see the impact over several months. the longer-term view, if you take a three-year view, people might reassess hong kong as a base for operations. a multinational corporation could choose singapore rather than hong kong. a longer-term assessment
that could change, as well. >> let's talk about the hong kong-shanghai. you have a playbook ready. everybody is wondering about when this thing is going to get off the ground. what happens in terms of your playbook when it actually comes to fruition? >> the playbook is two parts. there are arbitrage trades. namesare some shanghai that are cheaper than their hong kong names. we would see demand from different sets go up the border -- go up across the board. investors will benefit from diversification. for hong kong investors, they can go north and by utility names and other names much cheaper on shanghai. the yields are better.
trade,sentially the same arbitrage trade. china is the cheapest large market out there. there are a lot of blue-chip stocks at around 10 times earnings and giving you yields of 4%-5%. we expect a lot of demand from foreign investors, from the u.s., as well. up the space for managers who were not able to markets.s to the in this environment, is devalue the way to go for not only chance -- china but also japan? value isan, deep something different. -- wen't currencies aren't sure it currencies are the right way to play japan. is doing it, it is not
a sustainable model. we don't believe in playing the currency play. we look at countries that have a product, which is not easily replicable. many of japan's strengths are replicable by the chinese and koreans. the chinese and koreans make cars and good steel angela -- and electronics. in terms of in general, japan has a lot of value names, but you might be in it for a long time. we would rather look at names where there is an imminent catalyst or the product is not easily replicable. >> we are going to leave it there. luminance global fund founder and manager joining us today on the volatility of last week. we've got plenty more to come on bloomberg. "first up you are watching -- you are watching "first up." ♪
>> welcome back. the hong kong chief executive c.y. leung says the democracy campaign is out of control. of rising tension with more scuffles between protesters and police. ands between the government student leaders are expected to start tomorrow with the campaign into a fourth week. outside forces -- c.y. leung
contended that outside forces were involved. he declined to say from where. >> there is obviously participation, from organizations outside of hong kong over a long time. time.s not the only this is not the exception either. >> the number of hikers killed by avalanches in nepal has reached 40 with breast were is unsure how many people are still missing. search parties have only recovered half of the victims. is the second disaster to hit nepal this year. the swedish navy is searching the waters around stockholm after reports of days -- a foreign submarine. sweden is on its second highest alert level with rising tensions
between russia and ukraine. intersections had been intercepted from a damaged russian sub in swedish waters. moscow denied any submarines were in the area. the beijing marathon has been held. sponges were the order of the day. the official race long warned of slight to moderate smog, but the u.s. embassy said the air was hazardous. of 344, -- a level particular let's level of
poised for gains. taking action. narendra modi freeze up fuel prices to lure investors and spur the economy. and moment in history in prepares to jokowi take power. good morning to you. i am angie lau. checking in on markets, we are seeing global equities, the rebound that we've seen, extending in asia. the asx 200 climbing more than 2%. aussie dollar at $.87. this is helping boost what we , a higher open. in new zealand, the sentiment continues. the new zealand dollar spot is strengthening. we are counting down to the opens in japan and korea. in japan, the nikkei 225 once before closed 1.4% on.
the futures trading in chicago are pointing to a higher open. that dollar-yen is weakening. that is also helping to boost sentiment for exporters in japan. in india, there is optimism, as well. the prime minister has boosted his ability to introduce policiesly unpopular into important states. over the weekend does strengthen the prime minister's hand. >> modi is getting brought significant support. we have to mention that the bjp winning in these states, they are not a traditionally bjp stronghold. that is a good sign for him, to implement and carry out his policies. he will have to form a coalition.
however, these are not traditional strongholds. very good news for modi. state-level administration is very important in india. they carry out a large number of investmentncluding and other important policies. >> these victories are coming on the heels of a bold move in easing gas tariffs over the weekend. spending some political capital. >> his government as you mentioned, he freed diesel prices from state control for the first time in over a decade. he raised tariffs on natural gas over the weekend. these are big steps. of asia's biggest budget deficits. analysts say these tubes
decisions will help bring in a lot of investment and increase energy supply. the reason he can get away with these politically risky moves at this point in time, a slump in oil prices. that is giving him more room to act. brent crude in london is trading near the lowest since 2010. although voters tend to resist an increase in prices, inflation in india has slowed to a three-year low. that is giving him more room to act. with his landslide victory in may, he will have a stronger hand in pushing ahead with his economic policies. >> thank you for outlining all of that for us. indonesia will have a new president today. won the election on
a wave of optimism. he facesamin reports some daunting challenges. today sees history being made in indonesia. -- inauguration of jokowi joko widodo. unusually for indonesia, jokowi does not come from the traditional ruling class. he's not from the powerful military, nor is he the psion of a political dynasty. >> i never dreamed of becoming president. this,e the people want because they chose me, i will work the best i can for my people. a one-time furniture seller, it is his common touch that has made himself popular. however, that appeal has triggered great expectations of his presidency and won't make
the job of governing and easier. he must find a way to revive an economy growing at its slowest pace in more than five years and issuestricky political like indonesia's costly fuel subsidies. despite the daunting challenges, jokowi remains remarkably calm. he insists he can achieve 7% growth in three years and wean people off the fuel subsidies they have enjoyed for years. approach.nds on the if the approach is good and the reasons are explained, i'm sure it will be accepted by the people. >> jokowi faces tough opponents. he won july's election, but the rivals coalition commands a majority in parliament and holds the powerful position of speaker in the upper and lower houses. seems unconcerned and
points to his experience gained as a mayor and governor of jakarta. >> my party only had 38% in the assembly, and in jakarta, only 11%. there was never any problem. >> he was a success at mayor and governor. indonesia will wait to see if president jokowi can make it three out of three. haslinda amin, bloomberg. her special show on the new president later today. you will want to catch this. indonesia." time to look at some of the other stories we're following for you. iceland's banks is coming -- is eyeing a comeback. it is hoping to attract foreign investors in its first ipo since the country defaulted.
boosting mayhore boost demand, capital controls may hurt. a saudi lender is gearing up for the second-biggest ipo of the year, but for investment bankers, it won't be about the f ees. bankers on alibaba got the equivalent of 10 times the amount. lvmh is confident it can weather andslowing down in china, the world's biggest luxury goods maker announced slowing growth on the mainland. the company sees global sales of personal luxury goods rising at the slowest pace in five years. those are the top corporate headlines this monday morning. i am john dawson. >> japan's first passenger jet has made its official debut, lb it for years late. mitsubishi aircraft rolled out the jet in front of 500 guests.
let's go to chris cooper in tokyo. what is so special about this plane? >> one of the key features of the plane is the engine. using a new power plus engine. costsare set to cost fuel by 80%. while oil has been falling, fuel is still the biggest cost for airlines. anyway they can cut costs, they are keen to get it. if they can cut 20% with this airplane, that is what they are looking at. >> how successful would this jet be? what are the expectations that mitsubishi aircraft has of this jet? really a moment, it is two horse race within the regional jet market. you have canada's bombarding your and the brazilian company. it is almost 50-50.
what is happening now is mitsubishi is hoping to come into that market, and they are predicting 5000 jet plane demands in the next 20 years. they are hoping to get half of that market. they are going to be helped by the fact that bombardier is in plus market.- it's a b she is hoping it can take its place. hope but lots of challenge. it is a busy earnings week in the u.s. yang yang has a wrap of the big companies reporting over the next few days. >> after unveiling its new ipad and imacs, apple will be back in the news on monday first with the launch of its apple pay mobile payments system, followed by the kickoff of another big week of earnings releases.
the world's largest company by market value is expected to report an increase in fiscal fourth-quarter net income and earnings of $1.30 per share. the iphone maker sold more than 10 million of its new larger six and six plus models in their debut weekend alone. some of the other companies reporting monday, ibm, hasbro, and texas instruments. yahoo!, mcdonald's, and coca-cola are among the big names to report earnings on tuesday. also tuesday, jamie dimon will speak out on his battle with throat cancer. is active jpmorgan chase ceo scheduled to address the personal topic at the urban land institute's fall meeting in new york. the newly victorious national league champion san francisco giants will face-off against the royals in kansas city in game one of the world series. on wednesday, u.s. consumer prices in september should show
little change according to a bloomberg survey. that suggests federal reserve policymakers might keep interest rates low for longer. also wednesday, the inaugural twitter flight, the first ever mobile developer conference hosted by the social media giant , as well as earnings from the likes of boeing, at&t, and glaxosmithkline. amazon.com, microsoft, and comcast report on thursday. on friday, the advanced flow of the housing market will be on full display with new u.s. home sales data. a survey predicts a decline for september from the highest levels in more than six years. we can expect more ups and downs with the likes of ford, procter & gamble, and united continental closing out the big week. we will have all of the earnings and news right here on bloomberg television. >> that was yang yang reporting on the u.s. week ahead.
-- hong kong is forumg the 2014 asean today. dave, thanks for joining us. you are usually in singapore. you come to hong kong. there are protests on the street, but there is also a lot of opportunity if you take a wider view of it. >> there is a lot of opportunity. that may be the key point. the u.s., everybody has been talking about global growth being very weak, and it hasn't been good for five years.
the u.s., week. europe, very weak. despite that, asia keeps pounding out these growth rates. two years ago, 6% growth. this year is probably going to be a little bit better. asia your report, you say adds a germany every 3.5 years. >> when you grow it at a six and a quarter growth rate, you are creating a germany every 3.5 years. asia did this in the first four years following the collapse of lehman brothers. the u.s. led nowhere. japan went nowhere. in that first four-year period, asia cap going up and up. in the process, it puts an entire germany on the map right here. asia will slow down. it will continue to slow down. it doesn't take four years anymore to do that. the base gets bigger.
today, asia put a germany on the map in 3-5 -- 3.5 years. it is all about trade. when you talk about asean and hong kong, it is all trade flows. all of a sudden about inter-asian trade isn't really inter-asian trade. are you still confident with that? >> absolutely. we are getting strong flows. hong kong is in the middle of it. the stuff may be touches hong kong's soil if you want to go that far. it isn't the sense of what you normally think of. a country wants to produce this and sell it here. in hong kong, it is the import-export trade. that is where the value added comes from. if you look at exports in the traditional sense, domestic inputs and domestic labor and getting jobs that way, that is not the way it works for hong
kong. domestic exports are basically zero for hong kong. it is all about the flows. these flows continue to go up and up. they will continue to go up and up. when you are putting a germany on the map every 3.5 years, and it is getting shorter and shorter, the flows are going up and up. hong kong is taking advantage of that. what about indonesia? joko widodo is coming into power. of course, the work begins today. what are the challenges for indonesia? >> the same challenges they have always been. try to get investment going. from our perspective, we would like to see more of a structural shift towards manufacturing, less on, these, but it is these reforms they've been working on for years.
huge foreign outflows when the opposition to the parliament. >> indonesia has always been one of the more volatile regions. korea and indonesia are always top of the list. that is why we would like to see more of a shift towards manufacturing. it is more stable. it generates better income. that would be good for the country. take indonesia -- it is growing at a decent rate, 5.5%. next year, probably -- >> how do investors strategize or position themselves for more upside in 2015? >> basically, we have been running for three years. next year, it won't be much different. the remarkable fact is we are , irrespectivehis of the eurozone, irrespective of
japan, and pretty much irrespective of what is going on in the u.s. that is the key point. as long as we don't get financial market disturbance, frankly -- >> aren't you worried about that? >> yeah, yes. draghi came in -- >> doesn't that imprint on asia? europehere is a risk to and japan and the u.s., it comes to the financial markets. it doesn't come through the real economies anymore unless they really fall off a cliff. they aren't going to fall off a cliff. they are just going to grind away with lousy growth. as long as they don't fall off a cliff from a real economy perspective, frankly, we don't care. we have six years of evidence to show it. >> it sounds very optimistic. >> this is not optimistic. this is the reality. >> optimistic in the face of
what we've been seeing. >> it has been an eye-opener for a lot of people. the u.s., japan have gone nowhere. asia has continued to go up and up. i think people don't really see this. when you show it to them and explain it, there is no magic. it's just that asia has gotten a little bigger and a little bigger, and now it is big enough that it doesn't have to rely on these guys that it to have to rely on. that is a huge eye-opener. the u.s., europe, and japan can grumble along forever. frankly, it is not a big deal for asia. >> thank you for joining us today. us chief economist joining in our studio today. our reporters will battle it out on a stock exchange. a look at some of the movers expected at the asia open. ♪
exchange. we are taking a look ahead to the opens in japan and south korea. our intrepid reporters are here to tell us what stocks they are keeping an eye on. >> which company makes these screens? japan display, which last week fell 28%. the company forecast a surprise annual loss. shipments have been put off, delayed. the concern is, will other suppliers in japan pick up the business? downgraded to underperform. the stock, i reckon, will bounce back after dismal numbers last week. on the month, 42%. >> you think they are going to bounce back today. >> yeah. oversold. >> a bargain opportunity. what is your call?
homem going back to my south korea. about, buto talk they are saying that the indian government has delayed a permit on building a steel plant. osco will have to keep the $12 billion they had for that project in their pockets. over the weekend, they got that announcement. they are saying they need more clarification. we are going to see what happens to their shares today. they are going to be active after that announcement. they waited for nine years for that plant, still not coming around. >> we shall watch for pressure on those stocks. thanks, guys. we shall see. that is the verdict from the stock exchange. we are going to be back in an
hour to see how the stocks we've got have done. thanks. latest film has topped the box markets in north america. y" raked in nearly $23 million. the film is directed by david iran cost nearly $70 million to produce. girl"entury foxx's "gone fell to second pays -- place. by harley-davidson road fonda fetched $3.5 million on saturday evening. a was offered with certificate of authenticity. ownser collectors says he the bike. the actor himself says he has no idea if this is the right bike. that is a lot of money.
live from hong kong, streaming on your mobile and on bloomberg.com. in new trading week this monday in hong kong. you are long the market? it's looking good after the tumble of the past few days. john dawson joining us with more. >> how did markets open today? six consecutive weekly declines, the worst string of performances this year getting turned around. the nikkei is down 1.4%. be affecting could that sentiment but clearly it's about the strong yen. contrast up byte about 1%. the korean won more or less unchanged at 1062.41. also maybe that resignation which i know you have details
on. >> breaking news right now. meti minister offering her resignation today. futures in chicago had been pointing to a higher open in the morning. >> unless there is a market delay but that could have flipped sentiment. these are positive signs. >> japan is down 11% since the high from september, unofficial correction. this is also unofficial correction being the six month chart area and going from that level to this, that is unofficial correction, 10%.
therefore, reached the bottom? impossible to answer. the declines have been quite severe in regards to the selloff. today would have been a rebound except for japan. >> japan's new trade and industry minister was expected to resign. she has issued her resignation to prime minister abe. this is a blow to the cabinet here. there are allegations that her support groups ms. used -- ms. funds.wead misused are following that story. as you said, that is sort of the big story today. pointing to a slight positive and the vix index, the fear dropped whichay is a good thing. see, 87% since this
level and the more rises the more people are fearful. when it goes down, you are a little less fearful. perhaps the fear is being removed. very good figures on the economy. it unexpectedly rose, the highest and 7 years. jobless gains following to a 14-year low. all of that is therefore a positive. >> john dawson, thanks for the wrap up. some other stories we're following, china is preparing more help for the banks. the pboc planning a $32 billion injection. that may need any extra liquidity. central-bank pumping $82 billion in two china's five biggest lenders. there are delays over the start date of the hong kong-shanghai exchange link.
they initially planned for october but they said that there is no timeline for the program now. traders had spent weeks testing the system including a full trial in august. moody's has cut russia's rating to the second lowest. they were lowered one level as they were hit by falling oil prices and western sanctions over ukraine. russia spent $13 billion in foreign reserves last month to support the weakening ruble. hong kong chief executive says the democracy campaign in the city is now out of control. this came after a weekend of rising questions with more scuffles between protesters and of mongn the district
kok. we are there now live. you've been spending some time with protesters there this morning. what is the mood there? good morning. we are starting to see things pick up here now that we have entered into the rush hour. a lot of people passing by the protest site. mong kok is one of the most densely populated parts of the city. people are waking up and clearing away trash. calm. staying relatively much of a different scene since we were last year on friday when they were up to 500 police officers out here. they are far outnumbered by these protesters. city ine paralyzed the the past few days. they have a reopened the roads but now parts of it, just one lane of traffic moving right now. they have lined up here and it blocks.for
this is one day before talks between the government and protesters. they spoke to a television station here's saying he is concerned about how this will all end. it has gotten out of control even for the people who have landed, the people who started it, and the people who script did this. he is standing firm that the decision of the national people's congress is final despite the demands of students saying they're hoping to force the ruling saying the candidates be vetted by a community. leung says that could be some external forces in this movement and this is not just a domestic effort. take a listen. >> is obviously participation of
, organizations from outside hong kong and politics over a long time. this is not the only time when they do it. this is not the exception either. >> that's taking a little bit of conspiracytown, some theory there. does that undermine what we can expect for the talks? it made, and g. they say they are entering today's talks tomorrow with a little bit of pessimism. they are not sure how practical the solutions will be and there will be some direction for them to help but the chief executive said in an interview yesterday that there's plenty of room to talk about the structure of the nomination process. he's open to talks about couldng the scope so they
possibly have more candidates in 2017 in the election process. we will have to see. the talks are set to start tomorrow afternoon. >> yvonne live for us in mong kok on occupy hong kong. indonesia will have a new president later today after a moment of political history. wave of optimism and expectations are high. haslinda amin is in jakarta and we have a remarkable day for indonesia here. for the first time ever in its history, and elect the leader is handing over power to unelected successor. who is the man taking over?
a complete break from the past. not a political elite, not from military either. seventh president of indonesia, a country of 250 million people, an archipelago of 17,000 islands, some people calling it unbelievable. you can imagine the sense of hope and excitement. he faces tremendous challenges -- politically, economically, socially. he inherits an economy growing at the slowest days in five years, a parliament so divided, so challenging for him to put a cabinet in place. that is his top priority upon getting inaugurated. i asked him in an exclusive interview if he could put a technocrat in place as promised. this is what he had to say. 55%-60% of the cabinet is
professional. the others are politicians. that is reality of politics. aree is no way all of them professionals. do think that could help you eradicate corruption and achieve 7% growth? >> as long as they are professionals. finance, culture and energy ministers and state-owned enterprises have to be professional. >> have you had to barter for seats? will that take away some of the power you would have as president? >> we are open to everyone.
there would be no problem. my purdy only had 38% in the my party only had 38% in the assembly. you are working hard for us in jakarta. what can we expect from the inauguration ceremony today? at 10 :00 a.m.ce local time, 11:00 a.m. hong kong. joko widodo and his wife will make their way to the presidential palace and along the way, there will be street parties organized by volunteers. we know that the inauguration ceremony will be attended by all of the leaders of the political parties.
is if they will be there. he said initially that he has family commitment and will be overseas to attend to a family event that the latest reports suggest he may just had out for the inauguration. as far as the national leaders namesncerned, a slew of will be there including the prime ministers of australia, singapore, malaysia, un's -- u.s. secretary of state john kerry leading a team of five. the celebrations later tonight will be a huge party, a huge and bands inple indonesia who will be performing and we believe joko widodo will be there. he is a heavy metal fan. we will see if he will be taking to the stage to may be performed, too. >> rocking hard celebrating his
win. the hard work begins now. haslinda a man is also there for us live in jakarta. presenting a special show on the new president later today. indonesia after "asian edge." nikkei right now bouncing back after that initial lower open. and following the broader markets here across the region. global shares lost more than 3.2 aillion in october, but after rebound on wall street, we're seeing that extend in asia today. including japan. reversing losses after a surprise there. a new trade and industry minister, obuchi, resigning, a blow to shinzo abe's administration. that is helping exporters in
>> a look now at some stories we're following this week. malaysia third-quarter growth figures expecting to show the economy expanded at its slowest pace in more than five years. a bloomberg survey suggested they may cut next years growth target to as low as 7%. out with numbers and it is expected to drop 7% after the automaker reached an agreement with union workers in south korea to end strikes over pay. though stoppage is may have cost hyundai lost output. china september property prices. values continue to fall in
august. the central bank eased loan restrictions to stop the slowdown down. let's check markets for you. in tokyo, nikkei 225 started the boy, ishe slumps but, it rebounding fast climbing more extending this global equities rebound. there's also report that the pension fund will boost shares.nt in local australian asx 200 also climbing more than 1% here. we are heading to seoul, south korea, joining in this broader gain. general benchmark has seen six straight weeks of losses perhaps on this brighter note on the new trading week we can shirk that. of course, we shall see because it is a very early start. let's get more on the markets with my next guest, asian pacific equity strategist from
bnp paribas. thank you for joining us. when you take a look at the asian equity volatility that we've seen, really the global equity volatility that we've seen, do you think this week could be a little bit of a bright spot? what are your thoughts? >> the drivers this weekend going forward are likely -- the earnings reports coming out from different countries, the beginning has not been too bad. i am hopeful this week or at least in the near-term it should be a little bit like what we have seen. in certain countries and certain markets, they are reaching attractive valuations especially for certain stocks that have corrected much more. forill this provide a floor the selloff that we've seen?
the sentiment to buy into those bargains bnow? msci asia has corrected about 9%. there are some that have corrected a lot more. decentoptions with management quality, it may be time. >> where are you finding those opportunities? few in domestic korea. there are a few in india cyclicals. there are a few even in china when we downgraded that recently about a month ago. i think we are beginning to see such a value emerge in these pockets. out with bigming data sets this week including property prices and the like. do you think those measures will some declined or optimism?
or is it going to be just taken with a grain of salt? >> the numbers we are likely to see out of china would reaffirm that the slowdown is here to stay for now. the growth target for the next year would be lowered. there is another important event for the next session coming up starting today. we have to wait for that as well. it is a news flow-heavy week in china. >> it is more about the rule of law. how as a strategist are you looking at anything specific that could impact the equity world? there are important things that could be discussed there as well. as you pointed out, the rule of to the apply not just daily lives but also to how financial business is carried
out. but i personally think is the slowdown in china is here to stay from now on. that could get reaffirmed. some of these data points that we see going forward, secondly, when we had overweight in china that was on the basis of the many targeted stimulus taking effect in terms of lifting the economic numbers. that happened and it was clear that it was short-lived. and to carry on, these benefits, i think the chinese alternate he might send that. manishi raychaudhuri, thank you for joining us, from bnp paribas. joko widodo prepares to get sworn in later today. all of the fx headlines right after this short break. stay there. ♪
>> it is monday, october 20 and these are your fx headlines. japan's 1.2anges to trillion dollar retirement fund. the nikkei newspaper claims a government pension fund will boost its target for foreign debt and stocks to a combined 30% up from 22%. outflows, inflows, and also levels and currency. investors keeping a close eye this week as indonesia
inaugurates of their new president, joko widodo, today. investors are pushing back against higher u.s. interest rates. the euro is down sharply from 1.274 due to comments from the vice president of the european central bank who is skeptical of bonde purchase purchases. the charts this monday morning bright and early, dollar-young and also breaking news that obuchi has designed from the cabinet minister of trade within the last half hour. priceis is the current that the yen is out. i can also show you the indonesian rupee. , a 1%e new president difference keeping an eye on
that. on the forexe markets this monday morning. >> harley-davidson chopper "easy by peter fonda in rider" has been sold at auction even despite claims that it is not authentic. it was authored with certificates of providence but another thrill actor says he owns the bike used in the crash scene. the machine has fonda's signature on the tank but the actor himself says he has no idea if it's the right right. -- right bike. ♪
>> 8:30 a.m. in hong kong and the standoff continues between hong kong police and protesters kong.o democracy in hong a fourth week of protests here. has been the scene of repeated clashes this friday night. one hour from the open of trading here and you are watching "first up." rebound asia. japan leading markets higher after six losing weeks.
mapping out the future, the most important figures of china meeting in beijing. better late than never, the first homegrown plane. good morning. i'm angie lau. markets trading here in the asia-pacific. the nikkei 221 starting the day with gains extending despite losses on friday, one .4% down. seeing a reversal after wall street saw gains, we are seeing the global equities extend the rally here. south korea climbing more than 1%. the asx 200 also seeing gains as a much we take a look at more optimistic start to the trading week. over in india, the prime minister has boosted his ability to introduce intentionally policies with unpopular wins in two states. politically risky
decision over the weekend. has freedernment diesel prices from state control for the first time in over a decade. they also raised on natural gas. are steps meant to curb subsidies that were meant to help poor farmers in have contributed to one of asia's biggest budget deficits. natural gas output has been declining since 2010. exxon mobil and others have been discouraged for bidding on oil and gas blocks. these two big decisions on the sarin gas will help bring in a lot of investment and increase energy supplies. theseuld he get away with politically risky decisions? the slump in oil prices giving him more room to act. voters do not like increased prices but inflation has slowed to a three-year low.
him more wiggle room. he had some critical wins boosting his political capital. those are significant victories to help carry out his economic agenda. bjp becoming the biggest party in maharashtra where you see the financial capital of mumbai. wins in ariana -- districtthe industrial is.e new delhi they carry out a lot of policies including investment, land acquisition among other policies. this will definitely boost modi's economic agenda. >> thank you for that. the most powerful people in
china meeting to chart the course of policy over the next year. our china correspondent stephen engle reports that he will be strengthening the rule of law and institutionalizing the crackdown on corruption. not since the tumultuous days of mao zedong or the democracy movement of 1989 has a communist arty been in such a state of flux. law within is the question. this is the leadership compound where mao zedong and subsequent leaders spent a lot of time. like the fourth plan him, it is not open to the public. they like to keep it the dirty laundry behind those doors -- like the fourth plenum. made some enemies with his anticorruption campaign. plastic chinese kind of oligarchy and away. a former internal
security chief who amassed his wealth in the state oil industry. she is taking him down for alleged corruption. the members are usually untouchable but not anymore. >> he's got to deal with excessive greed because it is a threat to the stability of the party. >> factional fighting is nothing new but today there is the threat of a rising middle class more educated and aspirational of ever before and less tolerant of corrupt and out of touch leadership. created axi has year-long campaign to clean up among other things wasteful spending as well as hedonism. the state report saying it removed more than 162,000 so-called phantom workers from government payroll. it produced about 2 million fewer documents over the last year.
there were more than 74,000 cadres for extravagance taking back 100 14,000 officials cars and canceled 96,000 troops abroad. in all, cutting spending by 26%, $8.6 billion saved. is becoming an instance to look over vested interests at a time when millions are emerging into the middle class and they are the real future of you cannot ignore them. you have to give them hope for a future. growth has fallen and you have to get the angle of a better society. in a sense, this is a populist characteristic. these people really do have to
be looked after. if they don't, then they also could go after other people in hong kong. seemswonder security tighter than usual around tiananmen square. let's take a look at some of the corporate stories. volkswagen recalling more than one million cars in china as the u.s. is engineers may have to fix rear suspension defects. the recall was announced as the says quality regulator there were complaints. hoping to raise 5 billion aussie dollars. the coalition government is cutting spending and selling assets to rein in the budget deficit of more than 48 billion dollars. sensors have shut down a local thirde owned by china's richest man. a notice posted said tencent
daqin will be shut down for spreading vicious and harmful information. provides localit news to a northern province. japan's first passenger jet has made its official debut, albeit four years late. mitsubishi will not have -- .olled out the jet let's fly over right now to our bloomberg news transportation reporter in tokyo. a lot of expectation for this plane, but what makes it so special? the big hole of the plane is fuel efficiency. oil prices may have come down over the past few weeks, fuel costs are still the biggest expensive airlines and the -- and this will help cut fuel costs by 20% in its growing the attention of quite a
number of airlines. is this, how successful jet expected to be? a no doubt there are a lot of challenges as well in this industry. >> so far, they've gotten orders and options for 407 planes. they're looking to market for about 5000 over the next 20 years but at the moment you have two big players in their, canada and brazil. it's really a two horserace. what's happening now is bombard mbardia is leaving a space in the 70-100 seat market and they are hoping to come in there and take cap of that market share over 20 years. what's the goal here? the order book is a good start, but what does mitsubishi aircraft opened can do over the next decade? this is going to be a big
boost for the japanese aviation industry. japan last built a passenger plane 50 years ago, the ys11. they sold less than 200 of those planes and then they phased it out. one of the reasons was they did not have the after services needed for one of these planes. it's not just being sold in japan but globally. up withe they've teamed boeing to give them a worldwide reach. they have to sell service whether it is sold in the u.s., japan, or europe. >> a very good point. chris cooper, we will leave it there. bloomberg's transportation reporter joining us today from tokyo. next, the new indonesian president takes office today facing the realities of power after riding a wave of popular support. after the break, the challenges ahead for joko widodo. ♪
>> indonesia will have a new president today. joko widodo one in a wave of bomb to ms. demand expectations are high. as haslinda amin reports, he does face some daunting challenges. today sees history being made in indonesia. the inauguration of joko widodo marks the first time an elected from his takes office elected predecessor. unusually, joko widodo does not come from the ruling class. is that from the powerful military in nor is he the psion of a political dynasty. never dreamed of becoming president but because the people want this, i will work the best people.r my
i will work 24/7 for my people. >> it is a common touch that has made him so popular especially among the poor. that appeal has triggered great expectations of his presidency and won't make the job of governing any easier. you must find a way to revive an economy growing at its lowest pace in five years and tropical like the costly fuel subsidies. despite the daunting challenges, remarkably remains calm. he insists he can achieve 7% growth in three years and will wean people off the fuel subsidies they've enjoyed for years. it depends on the approach. if it is good in the reasons are explained, i'm sure it will be accepted by the people.
faces toughdo opponents. he won july's intervention -- election and he holds the powerful position of the speaker in the upper and lower houses. he seems unconcerned pointing to his experience gained as governor of jakarta. party only have 38 percent in the assembly and jakarta only 11%. there was never any problem. >> he was a success as mayor and governor. indonesian now waits to see if president joko widodo can make it three out of three. haslinda amin, bloomberg. guest is the indonesian specialist at the low we institute for international policy. aaron connelly joining us from sydney. the challenges are many but the
expectations for what joko widodo can do is hide. what is the reality here? he will face a number of challenges. he wants to take the political hit of doing that early on so perhaps he can be forgotten by the time he runs for reelection in five years. that is the number one populist issue. he will face a lot of opposition in the legislature which will make a big deal out of this and it will make it more difficult for him to get people on his side as he enters battles with the legislature over the weeks and months to come. >> one cannot help but draw similarity. he was the junior senator from illinois. those comen a lot of to light with that
administration. popular winner but not a lot of experience as well. how will he handle himself? >> the similarities are striking between obama and joko widodo >> .-- widodo. obama at least had an interest in foreign policy spending two years on the senate foreign relations committee and had a degree in international relations. injoko widodo has a degree forest three. he looks to his advisers to answer critical questions but when it comes to critical experience, the real reason he will become a resident of indonesia and a couple hours is because he demonstrated that he was a very good manager at the municipal level as the mayor of solo and governor of jakarta. he is trying to use is
management techniques he developed at the provincial level at the national level in the real test is whether or not those will work at the national level. and that are high, gdp is hardly enough growth to create the kind of jobs in terms of incredible population growth we see out of indonesia and the opposition is making sure that they will be heard here. jujitsu move can we expect? >> in solo and jakarta he was pretty good at navigating the opposition that he faced in his local councils but the national parliament is a totally
different ballgame. it's not clear that he has the political wherewithal to be able to get that done. the opposition is going after him hard. they are not compromising were trying to do deals with jokowi like they have in years past. it is a new phase for indonesian democracy and it's not clear that he knows how to or he is able given the constraints in his own political party who do not want him to compromise with the opposition parties. will be clear jokowi able to get the deals done. >> i want to ask you quickly before i let you go about indonesia's religious undertones here. it is still a secular state that more and more we are hearing state, a islamist caliphate, this versioning trend , really young, able for a lot of people that is raising its
issues on a national stage. indonesia's done a really good job dealing with its terrorism problem. it has a very low-grade small-scale terrorism problem now and it's done a pretty good job handling it. there is a concern indonesians will fight in syria and iraq. there are reports some of them have been killed recently in battles against kurdish forces. there is some concern the fighters might come back and create problems for indonesia and restart this terrorism. i think it's relatively unlikely given the handle they seem to have. yowyron connelly, institute. we will get some thinking into the new president joko widodo
later today. haslinda amin has rare access as he prepares to take power. as he visits the ports, a school, and the market. sitting down for a lengthy discussion about his policy and the challenges he faces. you can watch that at 12 noon hong kong-singapore time and p.m. later today. coming up next, one of our -- indexes takes a tumble. we are off to the exchange back in two. ♪
last year and an avalanche on mount everest dealing sure those nextring to wrap up before addition. the swedish navy is searching the waters around stockholm after reports of a foreign submarine. it is on its second-highest alert among rising tensions overen europe and russia ukraine. local communications have been intercepted from a damaged russian sub in swedish waters. they denied any russian warships or submarines are in the area. the beijing marathon has been heavys planned despite smog. face macs and sponges were the order of the day as about 30,000 runners and set off from tiananmen square. they warned of slight or moderate smog. they said the air was hazardous recovering pm 2.5 particular
level far above the who's recommended of 25. ethiopian runners won both the men's and women's races. welcome to the stock exchange. let's check in on what our reporters are looking at in asia. >> one of the biggest suppliers , they had a pretty bad week down 28% because surprisingly they forecasted emanuel lost because of shipments being delayed. that was a big concern and the stock got pummeled. csa downloaded with them. there was the idea that they were oversold and bouncing back up by 2%. >> quite a bounceback. south korea posco.
i used to use their gym when i was back in college. the indian government delayed a permit for them to mine iron ore. they are trading up. >> they have a gym? posco's? >> that's the verdict from the stock exchange. our reporters on the biggest event. brad pitt's latest film has topped the box office in north america. sony's world war ii drama "fury" cost $70by david ire million to produce. rl" dropping to number